Possible non-pying customer?

[tomcat172002]

Hi,

I have a question about a customer. I just started this year grass cutting I have 13 accounts. There was a guy in the neighborhood that I am doing that used to cut and decided to get out of it. I picked up about 4 of his old accounts. He has given me some great advice when it comes to equipment and customers. Anyways one the accounts I got he told me they were always 30 days out from there invoice. The other customers that I got from him he said were great and to keep them. This one he said he wouldn't do them. Since I don't have any employees that I have to pay, I took them. I put on there invoice for May Payment due upon receipt after 5 days 6/5 20% penality? He told me on there last payment it took them 3 months to pay. How should I handle this customer?

[realhuntin]

Quote[/b] (tomcat172002 @ June 01 2008,7:32)]* I put on there invoice for May *Payment due upon receipt after 5 days 6/5 20% penality? *He told me on there last payment it took them 3 months to pay. * How should I handle this customer?
First you can NOT charge 20% for late fees, but you can charge upto 2% per 15 days totaling 24% annually. I would continue services up to 1 month over due then call the customer on the past due if you get no responce then stop service, they will call you to find out whats up and then you can tell them you need payment now in full for all past due invoices and work before services are to continue, MAKE IT CLEAR TO THEM PAYMENT IS DUE UPON RECEPT. if it continues drop them like a HOT rock! it's not worth it. Or you can put them on a pay-as-you-go, so when you services the property you get paid that day, NO pay NO Service.


Good Luck

[Steve]

If you have a feeling or someone tells you before hand that a customer may have a problem paying, you can always consider having theym prepay each month before the service is rendered.

Also keep what Tim said in mind. I know a lot of lawn care business owners would like to charge that much in penalties but I do believe you could get into trouble doing it. This is something that is highly regulated by your state.

[gotta_mow]

You can however give a 20% discount for paying within 5 days. Send them a letter that says due to the current economy and gas prices you are forced to raise your rates by $XX (xx =20% but don't tell them that here). (unless you have a contract) Then in the letter let them know that this was a difficult desision and you have decided to offer a 20% discount for customers who pay within 5 days.

Ben

[Steve]

That is a very creative idea!

[Steve]

How did this work out for you?

[All Aspects Landscaping]

DROP THEM... theres way too much work out there... you dont need another hassle... good luck